The Teachers Retirement System of Louisiana (TRSL) is available to employees of Louisiana public schools and certain other state agencies, colleges and universities. Retirement benefits are based on the average of the highest salary earned for 36 consecutive months prior to retirement.
Salary is defined as any remuneration paid to an employee on which the employer withholds Federal income tax, including any contributions to tax-sheltered annuities and cafeteria plans and any payment for unused sick leave.
Benefits are calculated based on a factor of 2.5% for the number of years of service credit times the average salary (paragraph 2). All retirement annuity options listed below are based on that formula.
Annuity Options
Maximum Option
Of the different options available to TRSL members, this one provides the largest possible monthly amount throughout the retiree’s lifetime. However, no monthly benefits are paid to the beneficiary following the retiree’s death.
Option 1
The monthly payout is slightly reduced under this option but following the death of the retiree, the designated beneficiary(ies) will receive any remaining balance of the retiree’s accumulated contributions in one lump sum payment. It will normally take between 10-15 years to deplete the accumulated contributions. Any time that the member participated in DROP (explained below) is included in this 10-15 years. This is the only option that allows for the naming of multiple (or more than one) beneficiaries and the only option under which beneficiaries may be changed after retirement. This option is not available if the retiree elects the Initial Lump Sum Benefit (ILSB).
Option 2
The monthly payout is reduced under this option but upon the death of the retiree, provides for the designated beneficiary to receive the same monthly payments for the balance of his or her lifetime.
Please note, TRSL refers members to “financial professionals” such as EFS for advice on retirement choices and financial planning.
Option 2A (Pop-up)
The monthly payout is reduced under this option but upon the death of the retiree, provides for the designated beneficiary to receive the same monthly payments for the balance of his or her lifetime. However, should the beneficiary die before the retiree, the monthly benefit will automatically “pop-up” to the Maximum Option for the remainder of the retiree’s lifetime.
Option 3
Again, the monthly payout is reduced under this option but by less than the amount for Option 2 or 2A. Upon death of the retiree, the designated beneficiary will receive a lifetime benefit of ½ the amount the retiree was receiving.
Option 3A (Pop-up)
Again, the monthly payout is reduced under this option that is greater than Option 2 or 2A but less than Option 3. Upon the death of the retiree, the designated beneficiary will receive a lifetime benefit of ½ the amount the retiree was receiving. However, should the beneficiary die before the retiree, the monthly benefit will automatically “pop-up” to the Maximum Option for the remainder of the retiree’s lifetime.
Option 4
This option provides for a reduced amount, with the reduction determined by an amount the retiree designates for the beneficiary. The amount designated for the beneficiary cannot exceed the Option 2 benefit amount.
Option 4A (Pop-up)
Like Option 4, this option provides for a reduced amount, with the reduction determined by an amount the retiree designates for the beneficiary. The amount designated for the beneficiary cannot exceed the Option 2 benefit amount. However, should the beneficiary die before the retiree, the monthly benefit will automatically “pop-up” to the Maximum Option for the remainder of the retiree’s lifetime.
Deferred Retirement Option Plan (DROP)
A member* of TRSL, in lieu of terminating employment to begin receiving a retirement annuity, may elect to participate in the Deferred Retirement Option Plan (DROP), when the following requirements have been met:
- 50 years of service credit at any age;
- 25 years of service credit and a minimum of age 55;
- 20 years of service credit and a minimum of age 65 (excluding military service);
- 10 years of service credit and a minimum of age 60 (excluding military service).
*Requirements are changed for Food Service Plan A and School Food Service Plan B members.
*Retirement benefits for members in this category are calculated at a 2% benefit formula. The member must begin participation within 60 calendar days after the 1st possible eligibility for participation is met and participation is begun. Retirement benefits will begin on the 1st day of the month immediately following termination of participation in DROP.
All withdrawals from the DROP account may not begin until the member has terminated their participation in the DROP program and may be handled in any one of the following methods:
- Withdrawal of the total DROP account balance.
- Monthly withdrawals in an amount to be determined by the life expectancy of the participant
- Monthly amounts based upon an amount specified by the participant.
- Annual withdrawals in an amount to be determined by the life expectancy of the participant.
- Annual amounts based upon an amount specified by the participant.
- A one-time partial account balance withdrawal at the beginning of, or during the term of, monthly or annual withdrawals.
- Total account balance withdrawal at any time after monthly or annual withdrawals have begun.
Initial Lump Sum Benefit (ILSB)
This benefit is only available to those who have not participated in the Deferred Retirement Option Plan (DROP). The ISLB is not a retirement option; if you chose to participate in the ILSB, you must still choose from the following options: Maximum, 2, 2A, 3, 3A, 4, or 4A (Option 1 is not available if you elect the ILSB). Any lump sum chosen will reduce your projected lifetime retirement benefit. The ILSB will be an amount of not more than 36 times the monthly Maximum Option and may be:
- Directly rolled over into an individual retirement account (IRA) or other qualified plan.
- Remain in an interest-bearing account at TRSL.
- Be paid directly to you, subject to any state and Federal tax and penalties.
Alternative Contribution Plan (ACP)
Implementation of the new Alternative Contribution Plan has been delayed indefinitely.
In the interest of space, this is not an exhaustive study of TRSL. More details are available by contacting our consultants at 800.950.1829 or TRSL for additional materials or information.
Please note, TRSL refers members to “financial professionals” such as EFS for advice on retirement choices and financial planning.